Donald Trump’s victory in the 2024 election marks a turning point for the fashion industry as it prepares to navigate a political environment fraught with significant change. Trump’s return to the White House will challenge not only the global economy, but also the values that have defined the fashion game in recent years. Tougher trade policies, a push for domestic production, and a tariff war that threatens to change the fashion map. Sustainability? Forget it. Instead, get ready for a return to \u2018Made in America\u2019 with a touch of protectionism that will change the rules of the game.<\/p>\n\n\n\n
As the world continues to keep an eye on international conflicts – with Ukraine and the Middle East on the rise, and Taiwan at the centre of tensions between China and the US – the impact of a second Trump term on the fashion industry is shaping up to be a series of measures that will not only redefine the economy, but also the consumption, production and aesthetics of fashion globally. With a Republican-controlled Congress, Senate and Supreme Court, the president has the political power to implement fiscal and trade reforms that will shake up both the US industry and the global landscape.<\/p>\n\n\n\n
Trade policies are one of Trump’s main bets. His proposal includes a universal tariff between 10% and 20% on all imports, with a drastic increase for products from China (up to 60-100%). This reconfigures supply chains, forcing many US brands to rethink their production strategies and consider a return to more local manufacturing. European brands will also feel the impact of the new tariffs, raising the prices of Italian, French or Portuguese luxury goods, and implicitly favouring US manufacturers.<\/p>\n\n\n\n
In an interesting twist, this new policy could also put giants like Shein in check by ending loopholes that allow duty-free imports through the \u2018de minimis\u2019 rule (products worth less than $800). This kind of \u2018trade nationalism\u2019 is presented as an attempt to strengthen domestic production at the expense of global fast fashion.<\/p>\n\n\n\n
On tax reform, Trump seems determined to stay the course on the tax cuts of the Tax Cuts and Jobs Act of 2017. With a proposal to lower the corporate rate from 21% to 15%, and additional cuts for top taxpayers, large companies, and investors will see considerable tax relief. For consumers, however, higher tariffs could mean higher prices for clothing, reducing the purchasing power of the middle and lower classes, while the wealthiest will continue to benefit from direct cuts.<\/p>\n\n\n\n
On the other hand, the Harris administration’s option would have tipped the balance towards a tax hike on large corporations and the wealthiest, directing those funds to social and ecological initiatives, which would have had a smaller impact on the cost of living for average consumers.<\/p>\n\n\n\n
And now for the issue that touches us all the most: sustainability. Under Trump, forget about strict regulations on emissions, sustainable processes or eco-friendly materials. The future of fashion will be less \u2018green\u2019? Trump prefers less regulation and more incentives for companies to relocate production to US soil, albeit at the expense of the environment. What was once interpreted as a move towards a more sustainable industry now becomes a scenario of \u2018local sustainability\u2019 – which, in simple terms, means less emissions from imports, but also not a firm commitment to changing production processes in an environmentally friendly way.<\/p>\n\n\n\n
And let’s not forget the coming battle against fast fashion giants like Shein. The president has plans to cut the tax breaks that have allowed these platforms to evade taxes, closing the loopholes that have been their trump card. The so-called \u2018Fighting for America Act\u2019 promises to eliminate the exemptions that have helped companies like Shein flood the market with cheap clothes without paying tariffs. But the question remains: is fashion really going to change for the better if domestic manufacturing is prioritised over real sustainability? Don’t get your hopes up.<\/p>\n\n\n\n
If one thing is clear, it is that Trump is convinced that the US must regain its greatness through local manufacturing. The promise of a stronger \u2018Made in America\u2019 takes the lead, and to achieve this, he is offering massive tax breaks to companies that bring their production back. Incidentally, it is estimated that this could generate up to 1 million new manufacturing jobs by 2027. Key sectors such as automotive and technology will be the first to receive incentives, but of course fashion is not far behind. This return to \u2018make it at home\u2019 could have repercussions for both US and foreign brands that rely on production in Asia.<\/p>\n\n\n\n
What Trump won’t tell you, however, is that while this manoeuvre sounds good on paper, it could come at an economic cost: the reduced international competitiveness of US products, coupled with rising domestic production costs, could reduce US GDP by 0.5% annually. Here, large corporations will benefit, but the end consumer will have to foot the bill.<\/p>\n\n\n\n